The economy's growth potential will fall as the demographic bonus fades
Structural reforms would lift growth and incomes substantially
Export sectors led the recovery
The export basket has become increasingly diversified
The United States and the European Union are the main trading partner
Consumption is held back by rising inflation
Terms of trade are deteriorating
Unemployment has started to fall but participation has not fully recovered
The financial sector appears resilient
The current account deficit is financed with foreign direct investment
External debt has increased and foreign exchange reserves are comparatively low
Inflation remains high
Financial dollarization remains large
Inflation has fallen significantly since reinforcing Central Bank’s independence
The budget deficit has decreased
Current fiscal policies will put public debt on a declining path
Capital expenditure has been largely neglected
Education accounts for a larger share of public spending than in OECD countries
The public employment bill accounts for a large share of government revenues
Public employment reforms in Costa Rica impact high-income households more
Tax revenues are low compared to OECD peers
Costa Rica’s tax structure relies on social security contributions
The tax and transfer system could be more efficient in reducing inequality
Labour productivity is relatively low
Costa Rica has more stringent regulations than any other OECD country
Establishing a company is costly
Regulatory barriers on electricity are high
Informality is high
Employer payroll charges are high in international comparison
Low-income workers face a large tax wedge
High value-added services account for an increasing share of the exports basket
FDI inflows are larger in manufacturing and services
Processed agriculture exports have not picked up
Costa Rica’s infrastructure lags behind
Expanding access to fixed broadband is a challenge
Regulatory barriers on e-communications are high
Fixed broadband subscriptions are expensive
Perceptions about corruption remain higher than in OECD countries
Poverty has remained unchanged and inequality has trended up
Female labour market participation is low
Care responsibilities hinder women’s labour market participation
Costa Rica aims at being carbon neutral by 2050
Electricity is fully renewables-based and oil remains significant in the energy supply
There is a need to improve wastewater collection and treatment